Intellect Wireless v. HTC: Cannot Cure Misrepresentations with Obscure Language

Category: Inequitable Conduct 
By: Jesus Hernandez, Blog Editor/Contributor 
TitleIntellect Wireless, Inc. v. HTC Corp., No. 2012-1658 (Fed. Cir. Oct. 9, 2013).
IssueIntellect argues that the district court clearly erred in its materiality finding [because] Mr. Henderson’s prosecuting attorney quickly corrected [a] false declaration by filing a revised Rule 131 declaration, which did not include facts supporting actual reduction to practice [...].
Intellect, at *4 (text added).
HoldingWe hold that the district court did not clearly err in concluding that HTC proved materiality by establishing that Mr. Henderson engaged in affirmative egregious misconduct when he filed a false declaration [because subsequent revised declarations were too obscure and failed to inform the PTO as to the misrepresentation that there was never an actual reduction to practice].
Id. at *7 (text added). 

Procedural HistoryIntellect Wireless, Inc. (Intellect) appeals from the district court’s judgment that U.S. Patent Nos. 7,266,186 (’186 patent) and 7,310,416 (’416 patent) are unenforceable due to inequitable conduct.
Intellect, at *2.
Legal Reasoning (Prost, Moore, O'Malley)
Pertinent FactsThe court found that Mr. Henderson submitted to the PTO a declaration under 37 C.F.R. § 1.131 (Rule 131) containing false statements. To overcome a prior art reference during prosecution, Mr. Henderson averred that “the claimed invention was actually reduced to practice and was demonstrated at a meeting . . . in July of 1993.” […] However, the district court found that the claimed subject matter was never actually reduced to practice. […]
Intellect, at *3-4 (internal citations omitted).
Legal Standard, Generally“To prove inequitable conduct, the challenger must show by clear and convincing evidence that the patent applicant (1) misrepresented or omitted information material to patentability, and (2) did so with specific intent to mislead or deceive” the U.S. Patent and Trademark Office (PTO). In re Rosuvastatin Calcium Patent Litig., 703 F.3d 511, 519 (Fed. Cir. 2012).
Id. at *3.
I. Materiality
Legal Standard
Automatic Materiality“When the patentee has engaged in affirmative acts of egregious misconduct, such as the filing of an unmistakably false affidavit, the misconduct is material.” Therasense, Inc v. Becton, Dickinson & Co., 649 F.3d 1276, 1292 (Fed. Cir. 2011) (en banc).
Intellect at *3.
Standard for Curing a MisrepresentationWhen an applicant files a false declaration, we require that the applicant “expressly advise the PTO of [the misrepresentation’s] existence, stating specifically where- in it resides.” Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556, 1572 (Fed. Cir. 1983). Further, “if the misrepresentation is of one or more facts, the PTO [must] be advised what the actual facts are.” Id. Finally, the applicant must “take the necessary action . . . openly. It does not suffice that one knowing of misrepresentations in an application or in its prosecution merely supplies the examiner with accurate facts without calling his attention to the untrue or misleading assertions sought to be overcome, leaving him to formulate his own conclusions.”
Id. at *5-6.
Original Dec. Automatically MaterialIt is undisputed that Mr. Henderson’s original declaration was unmistakably false. Absent curing, this alone establishes materiality. There is no dispute in this case that Mr. Henderson did not actually reduce the claimed invention to practice—nor did he demonstrate a prototype in July of 1993. Thus, the original declaration contains multiple unmistakably false statements.
Id. at *5.
Subsequent Decs. Were not Adequately Cured, therefor Material[T]he revised declaration did not cure the misconduct because it never expressly negated the false references to actual reduction to practice in the original declaration. In the original declaration, Mr. Henderson told the PTO that he actually reduced the invention to practice and demonstrated it at a meeting in July of 1993. […] In the revised declaration, he described a “prototype now in the Smithsonian that was in development for a . . . demonstration” in July of 1993, a statement that could be read to mean that a device embodying the claimed invention was actually built during that month. [T]he revised declaration expressly mentioned “actual reduction to practice” and “bringing the claimed subject matter to commercialization,” further obscuring the truth.
Id. at *6 (internal citations omitted).
II. Intent
False Affadavit shows IntentSubmission of an affidavit containing fabricated examples of actual reduction to practice in order to overcome a prior art reference raises a strong inference of intent to deceive. See Rohm & Haas, 722 F.2d at 1571. Further, Mr. Henderson engaged in a pattern of deceit, which makes the inference stronger. In order to obtain claims directed to wireless transmission in several related patents, Mr. Henderson told the PTO that he built a device that could receive images via wireless transmission. […] Nevertheless, the device was, at best, a “simulation”—it contained only preloaded images and was not capable of wireless communication.
Intellect, at *9-10.
We have considered the parties’ remaining arguments and do not find them to be persuasive. We affirm the district court’s judgment that the asserted patents are unenforceable due to inequitable conduct.
Intellect, at *11. 
 Image Attribution Statement: Unknown, "Techniques de Premier Secours au début du XXème siècle,"  available under a Public Domain license, http://commons.wikimedia.org/wiki/File:1st_aid_in_1900_and_1929-yellow.jpg (last visited Oct. 9, 2013). 
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